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Correction:The article initially quoted inaccurate numbers for job growth expectations. The article has been updated to reflect accurate market expectations.
(Kitco News) – Despite growing recession fears, the U.S. labor market remains fairly resilient as the number of jobs created in March rose relativity in line with expectations.
U.S. nonfarm payrolls rose by 236,000 last month, the Bureau of Labor Statistics said Friday. The monthly figure was slightly above the market consensus estimate of around 230,000.
Some reports note this is the slowest pace of job growth seen in two years.
At the same time, the U.S. unemployment rate dropped to 3.5%, beating market consensus calls looking for an unchanged reading of 3.6% in March. An improvement in the unemployment rate comes as more workers enter the labor market. The report said the participation rate continues to trend higher, rising to 62.6% in March.
Revisions to January and February also showed net employment losses. January’s employment data was revised slower to 472,000, down from the previous estimate of 504,000. At the same time, February’s data was revised to 326,000 from the initial estimate of 311,000.
“With these revisions, employment in January and February combined is 17,000 lower than previously reported,” the report said.
The report also noted that inflationary wage pressures appear to be contained, rising in line with expectations. Last month average hourly wages rose by 0.3%, or nine cents, to $33.18 an ounce. In the last 12 months, wages have increased 4.2%, the report said.
Although commodity markets are closed, currency markets are open. Adam Button, chief currency strategist at Forexlive.com, noted that, in illiquid market conditions, the U.S. dollar moved higher in reaction to the report, which would be negative for gold prices.
Andrew Hunter, deputy chief U.S. economist, described the latest employment report as a mixed bag but is unlikely to shift the needle on market expectations regarding U.S. monetary policy.
“Whether or not the Fed squeezes in a final 25bp rate hike next month, we still think they will be cutting again later this year as the economy falls into recession,” he said.
Hunter added that the future of the Federal Reserve’s tightening cycle could depend on Wednesday’s inflation data.
The CME FedWatch Tool shows that markets are split 50/50 on whether the Federal Reserve will raise interest rates by 25 basis points next month or leaves its monetary policy unchanged.
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